Wipro Barred From World Bank Contracts, Shares Slide

[OhioChick]

Source: Bloomberg

Jan. 12 (Bloomberg) -- Wipro Ltd., India’s third-largest software exporter, and Megasoft Consultants Ltd. are barred from working for the World Bank, the institution said, less than three weeks after it disclosed Satyam Computer Services Ltd. was banned.

Wipro fell as much as 12 percent in Mumbai, the biggest decline in almost three months. Megasoft Ltd., parent of the consultant unit business, slumped 15 percent. Bangalore-based Wipro said it was banned in 2007 for offering World Bank employees shares in its stock offer in the U.S. in 2000.

Wipro’s disclosure, more than 18 months after the penalty was imposed, came after the World Bank decided to publish names of all companies that it barred from contracts. Satyam’s founder was arrested last weekend after admitting fraud in a scandal that has roiled equity markets and spurred tighter disclosure rules.

“In this environment, companies will make disclosures just to be sure they aren’t perceived to be lacking in transparency,” said Sandip Sabharwal, chief investment officer at Mumbai-based J.M. Financial Mutual Fund, which manages assets worth $1.2 billion in equities and bonds. “We need to look at the details before making an assessment.”

Wipro is barred from World Bank contracts from June 2007 for four years, according to a statement on its Web site. The purchase didn’t violate any ethics or conflict of interest policies, Wipro said in an e-mailed statement.



Read more: http://www.bloomberg.com/apps/news?pid=20601091&sid=a9JU.qfdvJ08&refer=india

---

First Satyam and now Wipro and Megasoft Consultants Ltd. Wonder who is next? Tata?

[ChromeFoundry]

1. Well, color me surprised.....not. n/t

[OhioChick]

2. Wipro ban deals blow for Indian IT

Wipro ban deals blow for Indian IT

January 12 2009 19:24

India’s outsourcing sector suffered a fresh blow on Monday when the World Bank revealed it had barred Wipro Technologies – the industry’s third biggest outsourcing company by revenue – from doing business with it.

The allegations against Wipro, which the bank accused of “providing improper benefits” to bank staff, come less than a week after news that the sector’s fourth largest operator, Satyam Computer Services, had been fixing its accounts in a fraud worth more than $1bn.

The ban on Wipro sent the group’s shares tumbling 9.3 per cent to Rs228.35 amid growing concern over governance in the sector – one of the country’s showcase industries with export earnings of more than $40bn.

Wipro, one of three Indian IT outsourcing companies affected by the World Bank ban, was barred in June 2007 for four years. The others included Satyam, barred in September 2008 in a case unrelated to the present scandal, and Megasoft Consultants, a smaller operator.

http://www.ft.com/cms/s/0/0e700c7e-e0dc-11dd-b0e8-000077b07658,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html

[Azlady]

7. Well, looks like Ford won't have my business

ha ha ha ha! Like I can afford a new Ford, but I sure the hell have a big mouth and will be telling all my rich friends NOT to buy Ford since they outsource USA jobs to CROOKS!

[riqster]

3. Having worked with both companies

...I say 'good riddance to bad rubbish'.

[Skittles]

4. seconded

[OhioChick]

5. IT Customers Closely Monitor Satyam Scandal

Many companies rely on the outsourcer based in India for vital technology operations like supply chain management and business intelligence.

They're keeping a close eye on it for now, because by Monday, the situation for Satyam customers could be vastly different.

Many companies rely on the outsourcer from India for vital technology operations like supply chain management and business intelligence. It's too early to tell how their relationships with the embattled Indian outsourcing firm -- and with outsourcers in general -- may change as a result of a major accounting scandal at Satyam, but with the future of Satyam up in the air, customers risk significant disruption of their IT processes.
Those companies that had contingency plans in place -- by multisourcing, keeping some redundant expertise in-house, or instituting processes to help quickly redirect services in the case of an emergency situation -- should have an easier time recovering if Satyam should fail. For example, one Satyam customer, an IT executive at a major financial services company, said in an interview that his company uses Indian outsourcers primarily for extra IT capacity and also has a relationship with competitor TCS, so it's a bit buffered from Satyam's problems.

A Ford spokesman said the company also has a number of existing relationships with other Indian outsourcing companies. It's unclear whether Ford can or will ditch Satyam as a vendor. "We are currently evaluating the situation and are not prepared to make any comments at this time," he said. Still, those additional relationships could prove critical.

The fallout could be big. On Friday, Satyam chairman Ramalinga Raju -- who revealed earlier this week that his company had, for years, manufactured revenue and profit margins -- was arrested. Meanwhile, the Indian government's Company Law Board fired Satyam's remaining board members and said it would replace them with a new slate of directors. Those moves come on the heels of a growing number of analyst reports suggesting Satyam is insolvent and could soon go out of business without help, putting 53,000 employees out of their jobs and exposing customers already smarting from a down economy.

More: http://www.informationweek.com/news/management/outsourcing/showArticle.jhtml?articleID=212701699

I wasn't aware that Ford used Satyam services.

[ChromeFoundry]

6. Yeah... Ford has no problem beating the drum...

for "Buy American." Guess they don't practice what they preach.

[ihavenobias]

8. Amen. n/t